US organic milk boom drives innovation

By Jess Halliday

- Last updated on GMT

Related tags: Organic milk, Organic food

Greater supply of organic milk in the US is encouraging product
innovation, according to Organic Monitor, while the opposite is
true in Europe, where shortages are still pinching.

The Harvey ruling, which requires organic milk producers to use 100 per cent organic feeds as of this month, says that dairy farmers have rushed to complete their conversion period. With a surplus of organic milk available, companies have had supply to play with - and use as a point of differentiation. For instance, Whitewave Foods has developed an organic milk fortified with marine-sourced omega-3 fatty acids. "Many new organic yoghurts, ice-creams, and cheeses are likely to come into the market this year as manufacturers focus on product innovation,"​ predicts Organic Monitor. However this new-found US abundance has implications in Australasia. In the past, the American market has tapped supply from Australia and New Zealand. With this no longer needed, the supply could be diverted to serving the European market. Organic Monitor has raised concerns about production of organic foods in Europe being able to keep up with demand in the past, and dairy products are a pertinent example of this. It says that the UK and Germany are the worst affected countries, where retailers are driven to sourcing organic milk from neighbouring countries. "Shortage of organic milk is stunting product innovations, with manufacturers focusing efforts on finding new sources rather than developing products,"​ it said. Some processors and retailers are seeking to overcome the problem with fixed contracts with dairy farmers to encourage them to go organic, "while others are offering to pay for inspection and certification costs".​ One company that has managed to secure its supply is US-based yoghurt producer Stonyfield Farm, which bought an organic dairy in Ireland last year. This is enabling it to launch its range of Stony yoghurts in the UK next month. As for the retailers, Organic Monitor reports that they are having to compromise on organic dairy products. For instance, Sainsbury's is offering 'transitional' organic milk for herds that have not yet completed their organic conversion. The first UK Whole Foods Market, set to open in London's South Kensington, is to import organic milk from Europe. However imports of organic produce have been in the spotlight this week, with the publication of a consultation document by The Soil Association. It suggests that produce that ranks up air miles should not be allowed to bear organic certification. In light of such sensitivity about food from far afield, Organic Monitor said: "In the long-term greater regional production is required especially as consumers become more sophisticated in their purchasing habits. "Domestic sourcing and food miles are becoming just as important as the organic production method. The organic food industry may have become global, however consumers are increasingly thinking local."​ According to data gathered by the International Federation of Organic Agriculture Movements, the Research Institute for Organic Agriculture and the Foundation for Ecology and Farming, Australia accounts for the largest certified organic surface area, with 11.8m hectares, followed by Argentina (3.1m hectares), China (2.3m hectares) and the USA (1.6m hectares). For 2006, the value of organic produce on the global market has been estimated to be more than €30 bn. The vast majority of products are consumed in North America and Europe.

Related topics: Markets, Fresh Milk

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